This article basically confirms what has previously been agreed by HMRC.
The initial problem is that they wrongly classified Bitcoin as 'vouchers' rather than as a digital currency. Which incurred a 20% VAT charge on the value of Bitcoin. So users would effectively have to pay 120% of the spot price to buy Bitcoins in the UK. Now that levy is only chargeable on the exchange fee (if there is one).
Although this is welcomed news the biggest obstacle still remains for British Bitcoin based businesses and that is banks. All British banks refuse to do facilitate Bitcoin related businesses due to it's unregulated status and until this changes there will not be any 'bitcoin economy' here in the UK.